Tuesday’s bond market has opened in negative territory to extend overnight losses in the international bond markets. Stocks are mixed with the Dow down 276 points and the Nasdaq up 201 points. The bond market is currently down 15/32 (4.96%), which should cause this morning’s mortgage rates to be higher than yesterday’s morning’s pricing by approximately .250 - .375 of a discount point.

September's Factory Orders report was posted at 10:00 AM ET this morning, revealing a stronger than expected 1.8% rise in new orders for durable and non-durable goods. Because this is a sign of strength in the manufacturing sector, we have to label the report bad news for bonds and mortgage rates even though it is not the reason for this morning’s bond selling.

Today’s election results will come into play in tomorrow’s trading, assuming that clear winning congressional candidates are declared. It is safe to assume that we will see some type of reaction tomorrow morning, but just what happens if Democrats control one or both chambers, or if Republicans retain control of both, is just a guess. The bond market (relevant to mortgage rates) is sensitive to the deficit and U.S. borrowing. At one point in the past, we could predict the bond market would like to see Republican control of congress because they were known as the fiscally conservative party. However, the deficit has swelled so much recently while both parties have been in control, that neither qualifies as fiscally conservative anymore. It is my prediction that we will see a minor move regardless of which party(ies) control congress next session.

There are two pieces of data set for release tomorrow morning that we will be watching. First will be the ADP private-sector employment report at 8:15 AM that estimates the number of private-sector jobs added to the economy. It is predicted to show 70,000 new non-governmental jobs were created last month after 90,000 were added in September. While this report does draw attention because it involves employment data, it is often given more than it deserves because it is not accurate in predicting the government’s monthly Employment report that comes later in the week. Good news for the bond market and mortgage rates would be a much small payroll number, indicating weakness in the employment sector.

The second release of the day will be the Institute for Supply Management’s (ISM) non-manufacturing index (aka service index) at 10:00 AM ET. This is the sister report of yesterday's ISM manufacturing index with this version tracking business executive opinions on conditions in the service sector rather than manufacturing. Analysts are expecting to see a reading of 54.6 for October, down from September's 54.9 to signal slightly slower activity in the sector. Bad news for rates would be a large increase since it would be a sign of economic strength.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.